Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — FY2006 Earnings Presentation
43 slides from Bendigo & Adelaide Bank's earnings presentation, August 2006
Slide 1: 2006 Profit Announcement
2006 profit announcement 1 Bendigo Bank announcement
Slide 2: Agenda
Agenda Rob Hunt Managing Director Branded strategy producing results Mike Hirst Chief Operating Officer The next growth phase Craig Langford Chief Financial Officer The result in detail 2
Slide 3: Branded retail banking strategy producing results
Branded retail banking strategy producing results Rob Hunt Managing Director 3
Slide 4: The Result
The Result • Continued progress on all fronts • Substantial improvement in headline result (reported ROE 15.1%) • Strong improvement in NPAT (excluding significant items) from $91.7m to $100.8m • Exceeded EPS guidance (11.8% increase) • Dividend increased by 7 cents to 52 cents (15.6% increase) • Gr
Slide 5: Bendigo – a branded retail approach
Bendigo – a branded retail approach An 11-year journey to date • Most foundation blocks now in place • Consistent performance is evident • Plenty of opportunity ahead, but… • Still work to be done to unlock latent value 5
Slide 6: Our strategy reflects Bendigo's core strengths
Our strategy reflects Bendigo’s core strengths • Strong reputation and brand • Community connections • Quality customer service • Ability to undertake collaborative commerce • Discipline to build gradually, as capital allows 6
Slide 7: Strong foundations allowed us to build…
Strong foundations allowed us to build… • A style of banking that confirmed our different approach • Our distribution capability towards a national and diversified coverage • A product range to support both existing and expected new client base • The skill base to cater for: – more onerous complianc
Slide 8: Our branded retail strategy is delivering
Our branded retail strategy is delivering • Raising deposits and loans in all markets across Australia (testament to the brand value) • 53% of our branches are now outside Victoria (with 36% of our business now coming from interstate) • Growth at profitable prices (as demonstrated by the gross margi
Slide 9: Our branded retail strategy is delivering
Our branded retail strategy is delivering • Community engagement is greatly assisting customer acquisition and retention • Our Wealth Solutions and Business Banking divisions play a key role and now add value in the majority of our markets • Our alliances and joint ventures are still maturing • Stra
Slide 10: Strategy is producing…
Strategy is producing… • Improved profit performance • More diverse revenue base • Improved brand and positioning (ability to grow at profitable prices) • Excellent customer services outcomes (best in the industry) • Strong relationships with customers, communities, and our partners • Solid Triple B
Slide 11: Strategic priorities unchanged
Strategic priorities unchanged • Grow at profitable prices • Sustainably increase shareholder value (NPAT and EPS) • Further diversify our revenue base • Continue to expand (invest) while demand for Bendigo remains strong • Strengthen the connection with our customers and communities (therefore impr
Slide 12: Future
Future • Competitive market expected to remain • Strengthen customer relationships through value-add, cross-sell and strong retention programs • Maintain high standard of customer service • Provide all regions with the skill to implement the full strategy • Wealth Solutions and Business Banking to c
Slide 13: The next growth phase
The next growth phase Mike Hirst Chief Operating Officer 13
Slide 14: Our Network is changing
Our Network is changing 2005 2006 Branch network composition Balance sheet footings Company owned Community owned Bendigo Bank announcement
Slide 15: …as is the way we manage it.
…as is the way we manage it. • Moved to State-based management • Increased number of Regional Managers • Responsible for: - Company and community branches - Business bankers - Financial planners - Community engagement • Greater focus on staff, sales and service as regions reduced in size 15
Slide 16: A premium service offering…
A premium service offering… • Customer advocacy levels highest in the industry and more than double the second placed competitor* • Customer satisfaction also continues to be highest in industry according to both Nielsen and Roy Morgan research • A complete product offering for our customer base * B
Slide 17: …driving an even contribution across the network
…driving an even contribution across the network • Retail deposits up 13% • Loans under management up 10% • Funds under management up 10% • Net Interest Income up 10% • Non Interest Income up 12%* • Interest margin strong • Customer numbers up 79,000 to 1.068 million (7.9%) * before significant item
Slide 18: Our wealth management offering has also progressed
Our wealth management offering has also progressed • Changed remuneration structure for advisers from sales-based to professional base salary with Group staff bonus • Continued programme of “home-grown” advisers • Customers can choose to pay commission or fixed fee • Launched Professional Series fun
Slide 19: Funds management growth
Funds management growth $ Millions 19
Slide 20: Relationship opportunities
Relationship opportunities Relationships are deposit-led with good penetration in loans and wealth management… % of customers in product 20
Slide 21: Relationship opportunities
Relationship opportunities Great scope for relationship growth % of customers 21
Slide 22: The result in detail
The result in detail Craig Langford Chief Financial Officer 22
Slide 23: Branded retail strategy delivering results
Branded retail strategy delivering results Shareholder returns 23
Slide 24: Branded retail strategy delivering results
Branded retail strategy delivering results Underlying profit 24
Slide 25: Profit analysis
Profit analysis Profit before significant items available for ordinary shareholders A$ Millions 25
Slide 26: Growth at profitable prices
Growth at profitable prices Interest margin % 26
Slide 27: Growth at profitable prices
Growth at profitable prices Analysis of net interest margin % 27
Slide 28: Growth at profitable prices
Growth at profitable prices Group managed loans / retail funds Retail funding mix A$ Millions % 28
Slide 29: Diversification of revenue
Diversification of revenue Profit contributions before tax A$ Millions 29
Slide 30: Diversification of revenue
Diversification of revenue Non-interest income $ Millions 30
Slide 31: Investing in future growth
Investing in future growth Operating expenses $ Millions 31
Slide 32: Growing shareholder returns
Growing shareholder returns Earnings and dividends Return on equity cents % 32
Slide 33: Excellent credit quality
Excellent credit quality Loan loss provisions and reserves Non-accrual loans Gross impaired A$ Millions 58.5 A$ Millions loans/total assets cos % 16.7 ° 45.5 8.6 14.9 2 12.9 5 12 41 4.9 10 a 42.2 K / 2004 2006 (2008 = 20082008 2006 General Specific [A Collective Note: General provision for 2004 & 20
Slide 34: Strong capital position
Strong capital position Capital adequacy Adjusted common % equity ratio 10.77 % 10.39 10.35 2.44 1.97 2.38 5.81 8.38 8.01 8.33 2004 2005 2006 | 2005 2006 Bendigo Bank annountement
Slide 35: To recap, our strategy is…
To recap, our strategy is… • A disciplined application of a branded retail banking strategy that plays to our strengths • Achieving consistent growth … at profitable prices • Growing both sides of the book equally in all markets • Producing consistently strong growth (five years of 10%-plus cash EPS
Slide 36: Summary & Questions
Summary & Questions Rob Hunt Managing Director 36
Slide 37: Additional information
Additional information Bendigo Bank announcement
Slide 38: Profit available for distribution to ordinary shareholders
Profit available for distribution to ordinary shareholders A$ Millions 38
Slide 39: Non-interest income
Non-interest Income Deposit A/C & transaction fees Loan fees Wealth Solutions and other commissions Share of Associates’ net profit/loss Trustee, Management & Other Services Insurance commissions Other Bendigo Bank announcement
Slide 40: Funds under management
Funds under management Sandhurst mortgage & cash funds 1,389.2 1,731.9 1,941.4 Sandhurst Industrial Share Fund 404.1 495.1 482.7 Bendigo Superannuation Plan 185.2 220.4 256.9 General Retirement Plan 60.2 68.2 80.2 Bendigo managed funds 94.6 123.7 1.35.5 Other 2Orl 70.3 70.2 Total 2,159.0 2,709.6 2,9
Slide 41: Funds under management
Funds under management A$ Millions 41
Slide 42: Commercial loans
Commercial loans % mmm Property & business services mum Retail trade mmm Construction wm “Manufacturing . . mame Wholesale trade mm Health & community service . . 4 mums Finance & Insurance mm Cultural & recreational services mE Education mums Agriculture, forestry & fishing “Personal & other servic
Slide 43: Loan portfolio
Loan portfolio By purpose By security % 43
Bendigo and Adelaide Bank — FY2006 Earnings Presentation on 6ix